NEW YORK, Jan 15 (Reuters) - Morgan Stanley is takingthree years to pay out 2012 bonuses to high-earning employees,three sources familiar with the situation said on Tuesday, astep that will better align incentives with shareholderinterests and make it harder for employees to leave.

Morgan Stanley is deferring bonuses for all employees whomake more than $350,000 annually and whose bonuses are at least$50,000, one of the sources said. The source said the deferraldoes not apply to retail brokers.

The long deferral in cash payouts for high earners isunusual, but more banks will likely follow suit, said JoeSorrentino, managing director of Steven Hall & Partners, a NewYork-based executive compensation firm.

"Many investors should be pleased by this, but employeesmight not be." Sorrentino said.

Deferring compensation can ensure that bankers and tradersdo not receive high pay for transactions that generate near-termprofits and longer-term headaches. Morgan Stanley ChiefExecutive James Gorman said in June that the bank wants toreward employees in a way that helps bank shareholders.

Investors have been pressing Morgan Stanley to rethink itscompensation practices for years. A Wall Street Journal reporton Tuesday said that a hedge fund that invests in Morgan Stanleywas focusing on executive pay at the bank.

Details about 2012 bonuses will be communicated to employeeson Thursday, the day before the bank posts fourth quarterearnings, said the sources, who asked not to be named becausethe matter is not public.

Mark Lake, a Morgan Stanley spokesman, declined to comment.

The new bonus plan will paid out half in cash and half instock. High earners will receive 25 percent of their cash bonusin May, another 25 percent in December, another 25 percent inDecember 2014, and the final 25 percent in December 2015,according to two of the sources.

For the stock portion, 25 percent of the equity award willbe paid out at the end of this year, 25 percent at the end of2014, and the final half at the end of 2015, the sources said.

Employees who make less than $350,000 annually and whosebonuses total less than $50,000 will receive their full cashbonuses in February, one of the sources said.

Morgan Stanley and other big banks have been deferring morecompensation in recent years. For 2011, Morgan Stanley employeeswho made more than $250,000 annually got deferred bonuses with a$125,000 cap on cash bonuses. Cash bonuses were distributed overa two-year period, while equity was given over a three-yearperiod.

Some smaller banks are trying to attract more talent bydeferring less. Jefferies Group, for example, is payingits employees bonuses all in cash.

Since taxpayer bailouts of large financial institutions in2008, Wall Street bonuses have gotten an intense amount ofpublic scrutiny. On Tuesday, Goldman Sachs Group Inc scrapped plans to delay paying bonuses to employees in Britainby two months. The plan, which would lower tax bills for thosepeople, set of a firestorm of criticism from governmentofficials.

INVESTOR PRESSURE

Morgan Stanley is trying to cut costs in a weak businessenvironment that has hurt its ability to meet performance goalsfor two key units - bond trading and wealth management.

Several years ago, the company outlined a plan increase itstrading market-share in fixed-income, currency and commoditiesby 2 percentage points. So far, the firm has failed to reachthat goal, partly because of a ratings downgrade by Moody's lastsummer and an aggressive plan to cut exposure to complexproducts that require more capital.

In its wealth management division, Morgan Stanley has backeddown from a target for a pretax profit margin of 20 percent, andis working to reach a more moderate "mid-teens" target by thissummer. Gorman has made a big bet on this business with acomplicated deal to acquire Citigroup Inc's Smith Barneybusiness.

Investors have begun pressuring the firm to cutcompensation, typically the biggest expense on Wall Street.

Reuters reported in October that top shareholders meetingwith Morgan Stanley executives had demanded to know why the bankcould not cut compensation to just 30 percent of revenue, downfrom current levels above 40 percent.